Almost three-quarters (73.4%) of the trust’s shareholders participated in its general meeting this morning, with 65.4% of the votes cast going against Saba’s plans to oust chair Wendy Colquhoun and the board of directors.

Most of the votes in favour of the resolutions came from Saba, with just 0.7% of shares not affiliated with the firm voting in favour.

See also: Saba loses Keystone and Baillie Gifford US Growth votes

Yet Saba refrained from voting with all of the shares it owns in the trust. It used 24.7% of shares in the general meeting despite announcing it owned 29.1% of the trust’s shares on 29 January.

James Carthew, head of investment companies research at QuotedData, speculated that Saba may have sold some of its shares in Henderson Opportunities ahead of the vote.

“This is the second time that Saba seems to have voted fewer shares than expected. I am starting to wonder if it had already started selling them before the meeting in expectation that it was going to lose,” he said

“Given the consistent pattern of rejecting Saba’s proposals, it would perhaps be a better idea if it simply withdrew the remaining requisitions.”

See also: Henderson European trust portfolio managers resign

CQS Natural Resources Growth and Income also voted against Saba’s proposals today, while the European Smaller Companies vote will take place tomorrow (5 February). Edinburgh Worldwide’s vote commences on 14 February.

Richard Stone, chief executive of the AIC, said: “Shareholders of Henderson Opportunities Trust and CQS Natural Resources have rejected Saba’s plans, which would have fundamentally changed the nature of their investment. The defeat of these resolutions demonstrates the combined power of thousands of individual shareholders, as well as wealth managers and institutions, who backed the investment trusts’ boards.

“It’s essential that shareholders in Edinburgh Worldwide who have not yet voted their shares do so, as the deadline is fast approaching.”

For Henderson Opportunities, the priority now will be to execute the plan to reconstruct and wind down it announced yesterday.

Shareholders will vote on these proposals on 21 February, but Saba still has enough shares to block them from going through.

The trust’s chair, Wendy Colquhoun, said: “As part of its campaign, Saba has publicly stated its aim to deliver substantial liquidity options to all shareholders. The scheme proposed by the board is designed to achieve this.

“The board therefore calls on Saba to respect the decision made by the company’s shareholders at today’s meeting and support the scheme of reconstruction.”

Markets became nervous that the new president’s 25% tariff on imports from Canada and Mexico and 10% levy on Chinese goods could trigger a trade war that would alter global trade dynamics.

Gold’s price reached £2,275 per ounce today (3 Feb), up from £2,103 at the beginning of January.

Funds such as Baker Steel Gold & Precious Metals, Jupiter Gold and Silver, and BlackRock Gold & General benefited the most from this surge in demand, beating all other Investment Association funds with total returns of 17.4%, 17.3% and 16.6% in January.

See also: Global markets fall as Trump tariffs spark trade war concerns

Following close behind them was Charteris Gold & Precious Metals, Quilter Precious Metals Equity, and Ninety One Global Gold, which were up 16.3%, 16.2% and 16.1% respectively throughout the month.

And gold’s rally could have further to climb yet, with many unknowns still lingering over how the affected countries may react – not to mention the nations that could yet have tariffs placed on their goods.

Russ Mould, investment director at AJ Bell, said: “The prospect of a full-blown trade war has spooked investors as they weigh up the prospect of widespread retaliation by countries on the receiving end of Donald Trump’s tariff frenzy,”

“Affected countries aren’t going to take the hit lying down and a tit-for-tat scenario is now looking real. That could result in higher inflation and put a stop to further interest rate cuts for the time being – exactly the opposite of what equity investors want to happen.”

See also: Baillie Gifford drops sustainable tag from £159m monthly income fund

On a sectoral level, IA Latin America had the best month in January, rising 11.4% on average thanks to its high exposure to commodities. Funds in the sector collectively hold over a third (35.3%) of their assets in basic materials and industrials.

But IA Latin America’s strong month could be short lived, according to Ben Yearsley, investment director at Fairview Investing. After being the worst performing sector of 2024 (falling 25% on average), last month could be a “dead cat bounce,” he said.

India delivers worst returns

Commodity portfolios may have had a strong start to the year, but IA India funds suffered the worst returns in January as the nation forecast its slowest economic growth in four years.

The latest Economic Survey projected gross domestic product to grow by 6.3% to 6.8% over the coming year, down from 8.2% last year.

Funds in the IA India sector fell 5.2% on average throughout January, with some dropping further than others.

Invesco India Equity was the worst performing fund of the month, with returns dropping 10.6%. It was followed by Ashoka Whiteoak India Opps and Comgest Growth India, which fell 9.6% and 9% respectively.

However, these funds came bounding back in 2024, with IA China becoming the fifth-best performing Investment Association sector of the year as returns leapt 13.8%.

This strong performance contrasted with prior years, with eleven funds making total returns upwards of 20%, and only two portfolios – Guinness China A Share and Fidelity China – reporting losses.

See also: Is China at a turning point, or will it disappoint yet again?

It begs the question: should investors be re-considering an allocation to China funds within their portfolios? Those with a sturdy risk appetite should certainly be eyeing up the sector, according to Chelsea Financial Services managing director Darius McDermott, who said China has some of the highest return potential on the market this year.

Bold stimulus plans from the People’s Bank of China (PBoC) are what propelled Chinese equities in 2024, and further measures to revive China’s economy and stabilise its property market are expected in the months ahead. These new stimulus announcements could again push China funds to new heights, according to McDermott.

See also: Chinese markets soar following announcement of ‘aggressive’ stimulus package

Yet the readjustment last year was sharp and fast, making it easy to miss. The IA China sector shot up 20.7% in the week following the PBoC’s announcement in September before levelling out, where it has stayed ever since. Investors who want to bank on another round of stimulus plans stimulating the market should act fast, or risk being left behind, McDermott warned.

“It shot up in a very short period of time, so if you’re waiting for another stimulus announcement, be ready to pull the trigger, because it won’t wait for you,” he added.

Tariffs could extinguish hopes for growth

There is one overbearing factor that could turn China’s outlook from hopeful to grim – tariffs. Trump’s proposed 60% tariff on Chinese imports to the US could offset the positive sentiment injected by upcoming stimulus announcements and plunge China funds’ returns back into the red, according to McDermott.

See also: How will Trump’s tariffs impact markets?

Until further details are shared on the extent of tariffs and stimulus plans, the potential outcomes for China funds remains stark. Investors stand to make some high returns from the Chinese market in 2025, but could equally lose just as much, according to McDermott.

“You can’t have a low risk way of investing in China. If you’re investing in China, you are seeking superior returns, and for that you must expect superior risk,” he added.

“If Chinese equities went up 40% this year I wouldn’t be surprised – but equally if they went down 40% I also wouldn’t be surprised. When you’ve got such a wide spread of potential outcomes, it really shows the inherent volatility in that market.

See also: China’s AI breakthrough causes US tech stock tumble

“There is more stimulus to come after the tariff position is understood, and that could be a catalyst as it was last year for a sharp upward tick. But the lingering threat of course is China’s interest in Taiwan – that question mark refuses to go away.

“And with the Communist Party of China becoming more authoritarian under Xi Jinping, all those question marks still have people feeling uncomfortable about investing in the region.”

Despite investors’ hesitancy to reallocate to China, Ben Yearsley, director of Shore Financial Planning, said China funds are “cheap and fascinating”. Share prices in the region have dropped sizably amid the downturn of the past few years, presenting an appealing entry point for those with the right risk tolerance.

See also: A World Of Higher Inflation 2025

Yearsley is continuing to buy funds such as Fidelity China Special Situations and Matthews China Discovery, which are up 18.1% and 16.6% respectively over the past year.

The former is trading at a 12.7% discount to its net asset value (NAV), which could provide investors with a slight buffer should returns tumble.

Aurora had successfully fattened itself up under the management of Phoenix Asset Management, with its assets under management (AUM) up almost 13 times to £193.6m since the firm took charge in 2016. But despite this growth, large wealth managers were still turning their backs on the trust before the merger with Artemis Alpha took place, according to its chair Lucy Walker.

“While we’d had fantastic organic growth, we knew a transaction would be a great opportunity to bring greater scale and liquidity to the trust,” she says. “Being realistic, the demand for size and scale has only grown since Phoenix took over.”

See also: Investment trusts: Growth story in Japan

Yet even after the merger, the newly re-named Aurora UK Alpha trust is not on the radar of larger wealth managers. A full-scale merger without redemptions would have boosted AUM by 64% to £353m, but many shareholders chose to sell their holdings at a lesser discount amid the consolidation process. The trust is only 34.8% larger than pre-consolidation, with assets of £260.9m as at December.

Walker says the trust will still have to double its size to reach the threshold necessary to even be considered by most wealth managers. It is this rapidly rising bar set by wealth firms that has triggered M&A activity among investment trusts to soar to new heights in 2024, she adds.

“The consolidation of wealth managers has been the catalyst without a doubt. When I was a fund buyer at Saracen, my minimum size was £100m, but that was already too low by the time I left in 2020. Then it went up to £250m, then £500, and even up to £1bn for the largest wealth managers. Clearly there have also been the challenges of interest rates normalising, discounts broadening and cost disclosure, but the single biggest factor has been the consolidation of the client base.”

Read the rest of this article in the January edition of Portfolio Adviser Magazine

A further 48 swapped ESG-related terms, with another 50 adding ESG-related terms to their branding.

The deadline for funds to readjust their marketing in line with SDR may have passed on 2 December last year, but analysts at Morningstar “expect an acceleration of rebranding activity in the coming months” as more funds seek to comply with the European Securities and Markets Authority’s (ESMA) naming guidelines on 21 May.

The firm anticipates between 30% to 50% of European ESG funds to change their names by mid-2025, with 4,700 funds falling within the scope of the ESMA guidelines.

Inflows into global sustainable funds hit a low of $36bn in 2024 – a far cry from the $645bn raised at their peak in 2021.

Yet Morningstar Sustainalytics’ head of sustainable investing research Hortense Bioy said the sector faces many more changes in the year ahead.

“2025 might be a reset year, with anti-greenwashing rules reshaping the ESG fund market, companies re-affirming or rolling back their sustainability initiatives, and governments reviewing their priorities amid a changing geopolitical and economic landscape,” she added. “These are new developments that sustainability-focused investors will have to navigate.”

Blake has been deputy CEO under Hawkshaw since February last year, but has worked at KBI Global Investors for over 30 years, first joining the group in 1994.

He also acted as the firm’s global head of business development and client services since 2004, which included him building out KBI Global Investor’s North American business between 2007 to 2014.

His predecessor Hawkshaw will retire alongside chief investment officer Noel O’Halloran, both of whom have been with the firm since 1992.

BlackRock gained assurances from Saba that it would “not engage in any takeover offer”, “seek to control or influence the board”, or “seek to change the composition of the board”.

Trusts that made this pact with Saba include BlackRock’s World Mining, Smaller Companies, Energy and Resources Income, and American Income trusts. It will be in effect until 31 August 2027.

BlackRock reached these agreements despite noting that “Saba does not hold any interests in the issued share capital” of any trust.

Yet it may be an effort to protect itself in case Saba attempts to oust and replace its boards, as it has attempted with Keystone Positive Change, Baillie Gifford US Growth, Edinburgh Worldwide, Henderson Opportunities, and CQS Natural Resources Growth and Income, Herald, and European Smaller Companies.

Each of these trusts has urged shareholders to vote against Saba’s proposals, expressing that they are self-serving and are seeking to take effective control of each company.

Keystone’s chair Karen Brade said she was “appalled by Saba’s actions and conduct”.

“Be under no illusion – we believe this US hedge fund manager is acting opportunistically, seeking to seize control of the board without a controlling shareholding, to pursue its own agenda,” she added.

The Association of Investment Companies (AIC) and Edison have gone a step further, raising their concerns directly with the Financial Conduct Authority (FCA) that Saba’s plans are in breach of the UK Corporate Governance Code.

They argue that Saba’s appointment of its own candidates would break rules protecting board independence.

In its governance code, the City watchdog deems a director biased if they “represent a significant shareholder” or have “a material business relationship with the company” – two factors that could work against Saba, considering it owns between 19% to 29% of the shares in each trust.

Analysts at Edison added: “A scenario in which an activist hedge fund is a significant shareholder driving the replacement of the current boards with its proposed directors, and subsequently appointed as the trust’s investment manager, creates a conflict of interest, especially when setting the terms of the management agreement.”

The US hedge fund has nominated its own partner and portfolio manager Paul Kazarian as director to most of these boards, as well as Saba’s founder and chief investment officer Boaz Weinstein as a director candidate at the Baillie Gifford US Growth Trust PLC.

According to the FCA, a director is not deemed independent by the City watchdog if they “represent a significant shareholder” or have “a material business relationship with the company”. Saba currently owns between 19% to 29% of the shares in each trust. In a previous statement, the firm has said it “intend[s] toadd one or more additional independent directors to each board as soon as reasonably possible following the trusts’ general meetings,” which would be in addition to the seven other independent candidates already put forth by Saba across each trust.

See also: AIC raises concerns over Saba with FCA

While Saba has also pledged that Weinstein and Kazarian would not vote on board decisions relating to Saba, Edison was sceptical that this would ensure independence.

“If these board members fail to adhere to Saba’s plans, the hedge fund could try to oust them in the same way it is currently trying to remove existing board members,” it said.

“Even if the proposed board members who are not part of Saba’s team have no formal business ties to the latter, we believe it is very likely that they will pursue Saba’s agenda rather than provide an independent perspective on the best way forward for these targeted trusts.”

The FCA has attempted to prevent external influence on decision making, and the AIC’s governance code notes that boards “should take action to identify and manage conflicts of interest, including those resulting from significant shareholdings, and ensure that the influence of third parties does not compromise or override independent judgement”.

See also: Trusts targeted by Saba campaign urge shareholders ‘take no action’

It is provisions such as these in the AIC’s Corporate Governance Code that make Edison unconvinced that board independence can be reached under Saba’s plans.

“A scenario in which an activist hedge fund is a significant shareholder driving the replacement of the current boards with its proposed directors, and subsequently appointed as the trust’s investment manager, creates a conflict of interest, especially when setting the terms of the management agreement,” it said.

According to a statement from Saba Capital, “If Saba’s nominees are elected, the board of each trust will be legally compliant at all times under the FCA Listing Rules and will ensure compliance with the highest standards of governance. Following the general meetings, each board will comply with the AIC Code of Corporate Governance as soon as practicable, as the nominees intend to appoint one or more additional independent directors with suitable experience. Saba and its nominees are focused on providing shareholders reliable returns, boards that advocate for shareholders’ best interests and managers that are focused on delivering value.”

Edison is not the only concerned party to raise alarms around this matter – the Association of Investment Companies (AIC) reported Saba’s potential corporate governance breach to the FCA last week.

Baillie Gifford US Growth Trust and Henderson Opportunities Trust are clients of Edison Investment Research.

Pellous moves to the group from Invesco, where he spent over a decade as a high yield and emerging market fund manager. He previously held roles at Legal & General, AllianceBernstein and AXA Investment Management.

See also: Stuart Parkinson becomes Stonehage Fleming CEO

His appointment follows a series of new additions made to Aviva Investors’ fixed income team. It hired Gita Bal as head of fixed income research earlier this month, and poached Fraser Lundie as global head of fixed income in May last year.

Daniel McHugh, chief investment officer at the firm, said: “The appointment of Fabrice represents the latest step in our efforts to expand our fixed income investment team.

“Fixed Income is a central pillar of our public markets offering, and our ambition is to have a market leading offering across all major sectors of the asset class.”

PA Live: A world of higher inflation

The group’s chief executive Tom Carroll said Odds would be “an instrumental part of shaping and delivering [Rathbone’s] growth strategy, focusing on diversifying and expanding our fund range”.

See also: PA Live Slicing The Regional Pie 2025

Odds joins following a two-year stint as head of client services at Atlas Infrastructure Partners.

Prior to this she worked at larger firms such as Jupiter Asset Management, where Odds spent five years firstly as senior product development manager and latterly as head of UK client services.

See also: Brooks Macdonald and Rathbones make distribution hires

Carroll highlighted Odds’ “extensive expertise in evolving the client propositions for asset managers of all sizes” as a key factor in her appointment.

Arona had worked at AXA in various roles since 2005 until becoming its CEO in April 2021. After almost four years at the helm, he now sets his sights on M&G after the retirement of former CFO, Sean Fitzgerald.

Joseph Pinto, chief executive officer of M&G Investments, said: “Marcello has a proven track record of growing and expanding asset management businesses globally.

“I look forward to working with him to drive our growth mission and to deliver exceptional financial outcomes for our clients and customers.”

Prior to his CEO role, Arona spent eight years as chief operation officer of AXA Investment Managers in Italy and another eight years as head of AXA Investment Managers and regional chief financial officer in the US.

M&G’s chief financial officer Kathryn McLeland, added: “He brings a wealth of experience to M&G having spent the majority of his career at the highest levels across the globe within the sector.”

Managers Ankur Crawford and Patrick Kelly built a concentrated portfolio of just 48 stocks, with much of its allocations focused on five tech companies. Tech behemoths such as Amazon, Microsoft, Nvidia, Meta, and Applovin account for the top 39.1% of the fund and drove most of its performance in 2024, according to its latest annual report.

These thriving tech giants were a source of high returns for many investors in 2024, especially Nvidia. Its soaring share price in recent years has made it a market darling, but Nvidia’s 179.2% increase in 2024 appeared mild compared to Alger Focus Equity’s fifth-largest holding, Applovin.

The mobile marketing technology company’s share price rocketed 751% last year, boosting the fund’s total return well ahead of other IA North America funds.

Alger Focus Equity has been a stand-out winner over the long-term too, boasting to be the fifth best-performing fund in its peer group since launching in 2019. Its total return of 193.7% over the period places it 80.3 percentage points ahead of the sector’s average return of 113.4%.

Other IA North America funds with an overweight in tech – and high allocations to Applovin – were also among the best performing portfolios of 2024. The Alger American Asset Growth and Lord Abbett Innovation Growth funds also delivered supercharged returns last year, climbing 50.6% and 45.9% respectively.

However, while US equity funds may have taken the top spots, it was portfolios in the IA Financials and Financial Innovation sector that delivered the highest returns on average. Funds in this group increased investors’ returns by 24.3% in 2024, whereas IA North America grew them by a slightly milder 22%.

The Janus Henderson Global Financials fund was the best performer in the sector, soaring 34.2% throughout the year, with Xtrackers’ MSCI USA Financials and MSCI World Financials ETFs following closely behind with returns of 22.6% and 29.1% respectively.

The sector benefited from high interest rates, reasonable economic growth and moderating inflation in 2024, as well as a surge in share prices following the re-election of Donald Trump in the US, who pledged to deregulate the sector.

Best performing sectors of 2024

Source: FE fundinfo

Nevertheless, investors did not need to look solely at financial funds or those exposed to tech-heavy US equities for the highest returns. The second-best performing portfolio of the year was dedicated to a more niche corner of the market – European emerging markets.

The JPM Emerging Europe Equity fund soared 53.9% throughout 2024 with a portfolio consisting mostly of Russian equities, which accounted for 67.7% of the fund’s assets.

Fairview Investing director Ben Yearsley speculated that this fund may have been another beneficiary of Trump’s victory, as the president-elect frequently vowed to force a resolution between Russia and Ukraine during his election campaign.

The best performing funds of 2024

Source: FE fundinfo

Another specialist fund to top the charts was the WisdomTree Blockchain ETF, which generated some of the highest returns in the Investment Association universe last year (up 44.5%) by investing in cryptocurrency technologies.

While prone to sharp turns in performance, crypto markets ended 2024 on a high as one of its leading currencies, Bitcoin, surpassed $100,000 for the first time.

This rally was again driven by Trump’s election victory, with the incoming president expected to take a more laxed approach to crypto regulation than the Biden administration. He has already appointed crypto advocates such as Elon Musk, Paul Atkins, and Howard Lutnick to influential positions within his new administration, who could influence Trump’s policy direction.